04 May 2020 – FIS Commits $150m to its Corporate Venturing Unit

The Big Three

As highlighted in last week’s podcast, some sectors are flying high and, certainly relative to the global financial crisis a dozen years ago, banking and financial services is one of them.

New York-listed financial technology (fintech) provider FIS has committed $150m to its corporate venturing unit as part of a joined-up approach to open innovation including its FIS FinTech Accelerator and FIS Innovatein48 research and development competition in addition to innovation labs.

Under Joon Cho, FIS Ventures will invest up to $150m in fintech startups over the next three years targeting artificial intelligence and machine learning, digital enablement and automation, data and analytics, security and privacy, distributed ledger technology and financial inclusion.

The blurring of lines between corporate and independent venture capital is continuing apace as all parties consider how best they can support entrepreneurs while fulfilling their five needs: capital, customers, product development, hiring and an exit.

This naturally brings the best investors together with the corporations best able to scale startups and then potentially acquire them, so it is little surprise in many ways to see US-based coffee retailer Starbucks form a co-investment partnership with venture capital firm Sequoia Capital China.

Starbucks said it would also look to form “commercial partnerships with next-generation food and retail technology companies” in China through a statement announcing the agreement.

The average worldwide population increase is currently estimated at 81 million people per year – a figure at this stage fortunately unlikely to be dented much by the Covid-19 pandemic – and all those people require feeding.

As GCV’s agtech supplement in March noted, modern farming practices, such as the use of soil-based and aerial sensors as well as drones, data analytics, and pest and pathogen detection systems, are taking hold. When combined with advanced fertiliser formulations, digital farming technologies developed by startups can substantially reduce nitrogen and nutrient loss and mitigate water pollution.

Enter Pivot Bio, a US-based agriculture technology developer that is trying to harness the power of naturally occurring microbes to provide more nutrients to crops. It has raised $100m in its series C round from a consortium including Bunge Ventures and Continental Grain but is apparently missing one of its earlier corporate backers.

Deals

Fintech on the other hand does not seem to have been affected by the coronavirus to the same extent. Investment and financial advice app developer Stash has raised $112m in a series F round led by $80m from lending marketplace LendingTree. The funding was bagged at an $800m valuation and lifted Stash’s overall funding to more than $290m. CEO Brandon Krieg told Bloomberg it intends to grow its customer base along with brand awareness as finances constrict in the US.

Consumer and business lender DMI Finance likely won’t lack customers in the downturn, and it has just pulled in $123m from video game publisher Nexon at a reported valuation that topped $1bn. India-headquartered DMI secured $200m in non-convertible debenture financing just last month and its commercial partners include Samsung, which is based – like Nexon – in Korea.

And another is business-focused neobank Cross River Bank, which has raised $100m of its own. The series C round comes less than 18 months since Cross River received $100m from backers including corporate CreditEase. The latest round is being co-led by investment adviser V Capital, which will help Cross River expand in its home country of Malaysia.

Inceptio loads up $100m

Paytm is among India’s most valuable startups having been valued at $16bn in a November series G round featuring Ant Financial and SoftBank Vision Fund. The mobile financial services provider is reportedly in talks to raise $100m or more from Microsoft to add to the series G. The round was sized at $1bn but Paytm has only received $720m of the cash so far, and Ant Financial will reportedly need government clearance to supply its share due to new foreign investment regulations.

Although corporates have not been keen on joining in the rush to back cannabis-focused startups, an interesting test case for tech based on traditionally illicit drugs may be Compass Pathways, which is working on a treatment for depression that utilises psilocybin from mushrooms (magic mushrooms, to be precise). The company just pulled in $80mthrough a series B round featuring Otsuka Pharmaceutical’s McQuade Center for Strategic Research and Development, and has received breakthrough therapy designation for its lead product from the FDA. That should be as good a go-ahead sign as any, you’d think.

University

Taysha stakes out $30m seed round

LifeSprout bolts on series A funding

Exits/Losses

SoftBank’s woes continue, the corporate announcing this morning that it expects to booka mammoth loss of nearly $6.6bn on its investment in WeWork over the last financial year – a period when it pledged a $9.5bn financing package to make sure the workspace provider could continue operations. The value of that deal has been hit hard by the shutdowns of WeWork locations across the world in the face of the coronavirus, and it’s worth noting the $6.6bn figure is separate to SoftBank Vision Fund, which has announced a projected loss of more than $16bn over the same period.

D2iQ has raised a touch over $250m from investors including Microsoft, Hewlett Packard Enterprise and Koch Disruptive Technologies since being founded as Mesosphere in 2013, but the cloud software and services provider is reportedly in talks with Google to be acquired. In a sign of the effect the Covid-19 shutdown is having, D2iQ reportedly laid off 34 team members recently, and the prospective purchase would likely value it at more than that $250m, but less than the $775m valuation in its last round two years ago.

To IPO or not to IPO? Right now it seems less of a question than a foregone conclusion for many companies but interestingly, the ones that are opting to go public in this economic downturn seem to be benefitting from the lack of competition. Oncology therapy developer Oric Pharmaceuticals has done so in a $120m initial public offering, floating at the top of its range having increased the number of shares by 50% and then seeing them open more than 60% higher. It had previously raised more than $175m in funding from investors including Taiho, Hartford HealthCare and Memorial Sloan Kettering Cancer Center.

Acacia circles over Woodford assets

Funds

Michigan State to administer $3m pre-seed fund


“Funky Chunk” Kevin MacLeod (incompetech.com)
Licensed under Creative Commons: By Attribution 3.0

25 March 2019 – Lyft Set to Raise $1.9 – $2.1bn in IPO

The Big Ones

The week kicked off with a long-awaited big one: on-demand ride provider Lyft set the terms for its IPO on Monday and is set to raise between $1.9bn and $2.1bn in an offering that will potentially value it at almost $23bn.

A consortium including Suning, Tencent, Alibaba Chongqing Changan Automobile, Dongfeng Motor and FAW have that will focus on mobility technology and in particular ride hailing.

OneWeb recently launched the first six satellites that will make up part of a constellation which will provide high-speed internet to remote areas. It has also raised a further $1.25bn in a round that included existing investors SoftBank, Qualcomm and Grupo Salinas.

On GUV, we’ve had a new spinout – Sherlock Biosciences – that isn’t so much noteworthy for the size of its series A – which currently stands at $17.5m, plus another $17.5m in grant funding – but for who its nine scientific founders are, a group of nine academic researchers the caliber of which we’ve seldom seen in a single spinout. They include, to name but two, none other than MIT’s Feng Zhang, the professor who patented the Crispr technology in 2014 (though there’s a legal battle with UC Berkeley which had filed a few months earlier but didn’t pay for fast tracking), and David Walt, who also co-founded the biotech giant Illumina, whose market cap stands at nearly $47bn.

Deals

Flexible electronics display developer Royole Group is said to be prepping its IPO, but will reportedly first look to raise about $1bn in funding at a valuation of near $8bn.

UiPath, the creator of a robotics processing automation platform, has so far raised $550m in funding from investors including CapitalG, the Alphabet subsidiary that used to be known as Google Capital, but it’s reportedly now chasing a further $400m.

Carmakers Hyundai and Kia combined to invest $250m in Grab late last year, and have now combined again to provide $300m of funding for another Asian ride hailing platform, India-based Ola.

Property trading services platform OneDoor has closed a $300m round backed by Lennar, SoftBank Vision Fund, GV and Access Technology Ventures at a $3.8bn valuation.

Legend Capital-backed mobile commerce platform Wish may be a long way from profitability, but it looks like it can still raise money. Wish, reportedly valued at $8.5bn in late 2017, is in negotiations with prospective investors including General Atlantic to raise $300m at a reported $11bn pre-money valuation.

Marqeta is also seeking funding at a unicorn valuation, having filed to raise $250m at a valuation of nearly $1.9bn. Visa, CreditEase and Commerzbank are all among the existing investors in Marqeta, the developer of a service that allows businesses to issue their own payment cards and process payments.

Elsewhere in Asia, India-based online video streaming platform HotStar has secured $153m from 21st Century Fox subsidiaries Star India and Star US.

Airbnb is in talks to invest $100m to $200m in another short-term accommodation platform, Oyo, which was valued at $5bn as of a $1bn round it closed last month.

Cosmetics brand Glossier is the e-commerce sectors’ newest unicorn, raising $100m in a Sequoia Capital-led series D round that valued it at $1.2bn.

Funds

Hanwha Asset Management, an investment subsidiary of diversified South Korea-based conglomerate Hanwha, has joined venture capital firm Golden Gate Ventures to raise $200m for an investment partnership.

NewMargin Ventures, a China-based investment firm backed by food producer Kerry Group and telecommunications equipment provider Motorola Solutions, has reached the first close of a RMB10bn ($1.48bn) fund.

Coffeehouse chain Starbucks provided $100m for US-based investment firm Valor Equity Partners’ Valor Siren Ventures I fund yesterday as the vehicle’s cornerstone investor. The fund has a target size of $400m and will seek the remaining $300m from additional strategic partners and institutional investors over the coming months.

Exits

SenseTime has long been rumoured to be joining the IPO queue, and now its chief rival in China’s facial recognition space, Megvii, is reportedly looking to raise $800m in an offering that could take place in the US or Hong Kong.

Alcon, the eyecare subsidiary of pharmaceutical company Novartis, has agreed to acquire portfolio company PowerVision in a $285m deal that will also enable Johnson & Johnson and Medtronic to exit.

Fastly, the content delivery platform developer that counts OATV, Deutsche Telekom Capital Partners and Swisscom Ventures as investors, has begun hiring underwriters for an IPO that could reportedly value it in excess of $1bn.

On GUV, NervGen Pharma, a Canada-based developer of nerve damage therapies based on Case Western Reserve University research, has completed an initial public offering (IPO) which raised gross proceeds of C$10m ($7.5m).


“Funky Chunk” Kevin MacLeod (incompetech.com)
Licensed under Creative Commons: By Attribution 3.0